Uganda Oil Prices Up as Shilling Hits Record Low Since the year Started
Ugandans will have to pay more for a litre of fuel as the costs have increased, yet again. A litre of petrol is now selling between Shs3,500 down from 3,300, diesel is selling at Shs3,350, Shs280 higher while kerosene prices range between Shs2900 to Shs2950.
This is the second time in a span of about three months that fuel prices have risen above the Shs3,500 mark. Fuel prices were last seen above that mark in December 2011 when a litre of petrol sold for between Shs3,900 and Shs3950, diesel sold between Shs3,650 and Shs3,700 while Kerosene sold between Shs2,900 and 3,350.
These prices were adopted in September 2011 when the shilling was performing poorly. The local currency slid, hitting a low value of Shs2950 per dollar in mid-September 2011, the worst in 11 years.
This, according to the chairman of Petroleum Marketers Association of Uganda and Shell Country manager, Ivan Kyayonka , is attributed to the rise of the dollar value against the shilling and rise in the international prices of oil.
“There are two factors that affect fuel prices the dollar rate and international prices of oil. If there is a change it these factors, it affects the fuel prices either upwards or down wards” he said.
By Tuesday, the shilling had hit its lowest of Shs2600 since the start of the year, a decline by over Shs400.
Davos discussions should prompt Ugandan businesses to think global International crude-oil prices have been on the increase since the start of the year due to disruption of supply in the entire world resulting from tensions in Iran. According to Mr Hannington Mpima, Kobil’s Publicist, the international prices of oil have gone up by 10 per cent and a metric tonne currently goes for $1000(Shs2500,000).
But according to Bloomberg website, a barrel of oil is at $105.71 (Shs264,275) , up by 5.3 percent from the February 2012 projection of $100.40shs(Shs251,000).
Consumer education trust Chief Executive Officer Henry Kimera , says fuel is a major player in price determination.
“Fuel is a major production factor, so its increase affects prices of most products. It is absurd that even when the fuel prices lowered, the market prices did not go down and now that fuel is becoming expensive, we will have to pay heavily to attain any commodity off the market,” Mr Kimera says.
An increase in market prices will be very unfortunate for consumers whose spending on goods and services may have to increase with a constant income base: “Prices are going up but salaries are constant, how shall the consumer be able to attain these goods surely?”
However, Mr Kyayonka blames the increase on existing economic circumstances: “We can not dictate that prices be lowered yet the international fuel prices are high and the dollar is becoming more expensive.”
Mr Kimera says the best option for consumers is to plan their spending, and spend mainly on necessities and investments from which they can reap back massively, if they are to survive through these hard economic times.
“Observing your expenditure is great, it helps you plan with the little disposable income to attain what you need and it also helps to limit your expenditure on non-investments”
Late last year, the public nursed exorbitant prices set by fuel dealers. This trend, experts say, is likely to continue as the shilling loses more value against the dollar.
By Flavia Nalubega: The Monitor Newspaper